Friday, September 19, 2008

Judgment Day for Capitalism draws ever-closer

The industrial Communist nations fell, so everyone assumes that Capitalism proved its merit and won. It seems more accurate to say: Communism fell, and Capitalism is still awaiting judgment.

The particulars of my observations at the time were only tangentially related to the current financial crisis, but the larger point about capitalism's fate seems to be proving correct. It's becoming reasonably clear that (a) the United States is nationalizing a significant chunk of the financial engine that makes it the center of the world economy, and (b) if we didn't do this, then our economy would come apart at the seams, taking down a significant chunk of the world economy as well.

It seems possible that the 21st century's dominant species of economy could be the weird technocratic cousin of crony capitalism that's being improvisationally invented before our eyes this week. It's a form of central planning which leaves the details to markets, but periodically stages massive interventions whose ripple effects dwarf the entire economies of most socialist nations.